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Aviation Fuel Supplier Sees 40% Sales Fall

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading aviation fuel supplier yesterday said its sales had slumped 30-40 per cent year-over-year, and warned that private pilot flights into Abaco were “at an all-time low”.

Describing Marsh Harbour’s international airport as “a ghost town”, Randy Key, principal at Zig Zig Airways, told Tribune Business that despite most of the facility’s aviation gas and jet fuel sales going through his company, business was “down substantially”.

Attributing much of the decrease to the Government’s new aviation taxes, which have deterred private pilots from flying to the Bahamas, Mr Key said the Christie administration was failing to look “at the other side of the coin”.

Pointing out that the Government earned $0.07 in royalties for every gallon of aviation gas sold, Mr Key said its drive to generate $4-$5 million in revenues from the new fees was likely to result in a “net negative” - for both itself and the wider Bahamian economy.

“The Marsh Harbour International Airport right now is like a ghost town,” Mr Key told Tribune Business. “I’m here at the main terminal at 4pm in the afternoon, and there’s not a single private aircraft on the tarmac. There’s not a single one here.

“It’s the small single and twin engine guys that have just decided they’re not going to put up with these fees, and as a matter of principle have decided to go Florida and elsewhere. People have told us they’re just not coming this year, and are flying to other destinations.”

Calling on the Government to listen to the cries of the private sector, especially those most impacted, Mr Key said in a letter to this newspaper: “When those of us in the aviation industry can tell you general aviation flights into the Abacos are at an all-time low, it would be reasonable for someone to take note.”

He added that he was prompted to write after Tribune Business last week revealed the story of one private pilot, Michael Penman, who this year spent the $25,000 he normally injects into the Bahamian economy in Jackson Hole, Wyoming.

Mr Penman added that he had cancelled three trips to the Bahamas in the past two months, costing this economy some $6,000.

“What the Government is not looking at is that this is a double-edged sword,” Mr Key told Tribune Business. “For every gallon of gas we sell, the Government gets seven cents in royalties. Fir every gallon of gas we do not sell, that’s seven cents gone.

‘I’d say we’re probably off 30-40 per cent at the moment in fuel sales. We are down significantly.

“The small airplanes that fly into Marsh Harbour and Treasure Cay from Fort Pierce and Miami, and even as far up as the Carolinas, it’s a substantial amount of people.”

While unable to quantify it, Mr Key said a “good amount” of the sales decrease was attributable to pull back by private aviators.

Apart from a $50 Customs declaration form processing fee, the 2013-2014 Budget has also introduced a $25 per head departure fee for private aircraft passengers, plus a $50 charge for making a refuelling stop in the Bahamas.

Urging the Government to reverse course over its new aviation taxes “before it’s too late”, Mr Key said they would only caused depressed spending in Family Island economies.

As a second home driven economy, Abaco is particularly reliant on visitors who come by private plane or boat.

Questioning the policy-making process in government, Mr Key said: “Sometimes I think that in that group of decision makers there’s 10 attorneys, and they say: ‘If we want to get $5 million in extra revenue, let’s raise these taxes’, but they’re not looking at the flip side.

“What’s it going to cost at the end of the day?.... On the other side of the coin, if no one is coming here and spending money, this is going to be a net negative.”

A reduction in private aviation traffic will result in less money circulating in Family island economies, Mr Key added, via reduced spending on the likes of hotels, restaurants, golf cart and auto rentals.

Describing this as “a snowball effect”, Mr Key added: “It all adds up.”

He pointed to what happened when he and his wife went to dinner at the Great Abaco Beach Resort on Sunday night.

There was only one other couple in the restaurant, and Mr Key said a waitress informed him that only two rooms were currently occupied on a property that has 89 ocean front rooms. And just one boat was moored in the 198-slip marina.

While the Bahamas is at the weakest point in its annual tourism cycle, Mr Key said American Eagle had suspended its flights to Marsh Harbour for this month, with plans to resume in October.

And Silver Airways had reduced its six-seven daily flights to just two.

Comments

msmuffett 6 years, 8 months ago

wouldnt be that new landing fee would it that has general aviation enthusiasts from florida and about, on edge? hmm how about the boaters? who can we tax next?? I know the cubans. ask Ramon.

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